Best Secured Credit Cards to Build Credit

Secured credit cards offer the option to build credit and establish a good credit history. At the same time, you get the convenience of a credit card to make payments online and in stores. Secured credit cards are a more accessible way to build or repair your credit. 

Some of the cards offer good rewards programs and no annual fee. For a secured credit card, you pay a refundable security that establishes your credit limit. Read on for the best secured credit cards to build credit this year.

Quick Look at the Best Secured Credit Cards to Build Credit Score

• Best for No Annual Fee: Capital One Quicksilver Secured Cash Rewards Credit Card
• Best for Bonus Rewards Categories: U.S. Bank Cash+ Secured Visa Card 
• Best for Budget-Conscious Students: Firstcard® Credit Builder Card with Cashback for College Students 
• Best for Deposit Refund: Discover it Secured Credit Card
• Best for Cash Back Rewards: Bank of America Customized Cash Rewards Secured Credit Card 
• Best for Lower APR: First Progress Platinum Prestige Mastercard Secured Credit Card

What Are the Best Secured Credit Cards to Build Credit Score?

While there are different types of credit cards, there are also secured credit cards with various benefits. Here are the best secured credit cards to build credit this year. 

1. Best for No Annual Fee: Capital One Quicksilver Secured Cash Rewards Credit Card

The Capital One Quicksilver Secured Cash Rewards Credit Card offers some of the best rewards options on this list, with 1.5% cash back on most purchases. You'll have to put down a deposit after you're approved to secure your credit line, but there's no annual fee and no foreign transaction fees. Better still, the 1.5% cash back can go straight to paying back the card. 

2. Best for Bonus Rewards Categories: U.S. Bank Cash+ Secured Visa Card 

Another winner for cashback rewards and no annual fees, the U.S. Bank Cash+ Visa Secured Card can help you earn up to 5% cash back on common expenses like fast food and cell phone bills, while building credit. Better yet, you get to choose the categories, allowing you to optimize rewards where you spend the most. 

3. Best for Budget-Conscious Students: Firstcard® Credit Builder Card with Cashback for College Students 

Students need financial flexibility, but they may not know where to look. You might not be approved for traditional credit cards, but you can use Firstcard to get a no fee option with no minimum credit score or minimum balance requirements. Cash back rewards are: 15% merchant, 10% random and 1% unlimited, meaning that you can get paid back for college expenses and more. There’s also a high APY for cash deposited in the account you have not yet spent.

Finally, virtual card access helps with online shopping and times when you have your phone but left your wallet behind.

4. Best for Deposit Refund: Discover it Secured Credit Card

Discover it Secured Credit Card is one of the rare secured credit cards that offers 2% cash back in certain spending categories and helps you transition to an unsecured credit card. You can earn 2% cash back at gas stations and restaurants and 1% unlimited cash back on all other purchases. After seven months of on-time payments, you'll be eligible for a deposit refund. 

5. Best for Customized Cash Back: Bank of America Customized Cash Rewards Secured Credit Card 

The Bank of America Customized Cash Rewards Secured Credit Card allows you to choose a 3% cashback category where you spend the most. While it doesn't have all the other perks of cards on this list, for many users, 3% cash back in their highest spend category is enough to choose this card. 

6. Best for Lower APR: First Progress Platinum Prestige Mastercard Secured Credit Card

While the First Progress Platinum Prestige Mastercard Secured Credit Card charges an annual fee of $49, its low APR makes it the best pick if you plan to carry a balance on the credit card. You'll save more in the long term with the lower interest. However, if you want to maximize credit building, prioritize paying off the card in full each month. 

What is a Secured Credit Card?

A secured credit card is a type of credit card in which the line of credit is backed by a cash deposit by the cardholder. This deposit acts as collateral to pay the account, offering the credit card issuer greater security in case the cardholder fails to make payments. 

A secured credit card is a good option for people with low or no credit scores to build a positive credit history. The required deposit on a secured credit card is usually $200 to $300, which you will get back when you close the card. In some cases, you can earn back the deposit sooner. 

Benefits of Secured Credit Cards

There are numerous benefits of secured credit cards, including:

• Easier to get accepted, even with low or no credit history
• Get a new option to make payments online or in stores
• Build a positive credit history

Key Factors to Consider When Choosing a Secured Card

Different factors to consider when choosing a secured credit card include interest rate or APR and fees, credit limit, eligible purchases, statement credits and rewards. Generally, you want a secured credit card with no annual fee, low interest rates and options to earn rewards or statement credit relevant to your spending habits. 

Before taking out a secure credit card, be sure you can pay it on time in full each month to take advantage of its credit-building benefits. 

Tips on How to Build Credit with Secured Cards

Tips to maximize the benefits of secured credit cards include:

• Pay off the card in full each month. You can set up automatic payments to ensure you don't miss a credit card payment. 
• Ask for a credit line increase after three to six months to (potentially) boost your credit score. 
• Monitor your credit score at annualcreditreport.com or with your card issuer to ensure the expected credit score boost.
• When you can, upgrade to an unsecured card but maintain the habits you used with the secured credit, such as paying it off in full each month - on time.

Final Credit-Building Tips

While you could see a positive impact on your credit score in as little as one to three months with secured cards to build credit, remember to establish habits to continue credit-building long-term. For example, you can set up automatic payments for the minimum due to avoid having a late payment again. Make a habit of paying off the card in full each month and only charging what you can fit within your budget. 

For faster credit-building, consider becoming an authorized user on a credit card of a friend or family member with a good credit score. You can also use rent-reporting companies to report past on-time utilities and rent payments. Learn more about credit building here, including how to raise your credit score overnight or find out more about the best secured credit cards.

Frequently Asked Questions